If you've been following along, we've got our first major problem (READ: What the F*ck?!?!). After 11 straight months of consistent rental payments and no maintenance/repair costs...BOOM! I'm finally hit with a big issue.
My First Property is officially vacant and I was never informed by my property management company. Not only that, but the place is in need of repair. Oh yeah, and the garage is not properly secure, and has a squatter living there....not cool/fun. Straight up SUCKS.
SO, it's time to take action and get this turned around.
Step 1 - GET A NEW PROPERTY MANAGER! I've interviewed a couple property management companies, spent over an hour on the phone with all of them, assessed their services, benefits, fee structures, etc and I'm close to choosing one.
*3/26/18 UPDATE - NEW PROPERTY MANAGER HIRED*
Here are my next step priorities:
1. Formalize agreement to have new property manager take over My First Property - DONE
2. Re-key front door, side door, and secure garage - DONE 3/28/18
3. Assess repairs needed and prepare scope of work - DONE 3/28/18
4. Evaluate repairs, budget, and After Repair Value - DONE 3/28/18
5. Decide to rent (preferred) or sell My First Property - DONE. I'M SELLING! (READ HERE)
As you can see, it's going to be a busy time for me. Adding a little more to my plate...I'm closing on My SECOND Property in less than two weeks.
I could easily say "I'm DONE".....crawl up and quit...but this is life...this is taking risks....and I'm pushing through...should be a crazy Spring!
Stay up to date by reading: How's it Currently Performing?
Jump In Nation, we've got our first major problem. After 11 straight months of consistant rental payments and no maintenance/repair costs...BOOM! I'm finally hit with the first real issue. And it's a big one.
The. Place. Is. Vacant. And I was never informed by my property management company. After getting a tip online from someone on Biggerpockets, I sent a 3rd party company out to assess the situation. To my disbelief, sure enough, there's a lock-box on the front door. Neighbors confirm it is vacant.
And it gets even better! And also very strange....
There's someone potentially squatting in my garage.
Adding insult to injury.
The place definitely needs some work after a year of apparent neglect.
Well, looks like it's going to be a fun next few weeks as I navigate through all of this. #1 priority right now? Get a new property manager. This is COMPLETELY UNACCEPTABLE.
Then I need to assess the damage. What immediate repairs need to take place? Do I fix it up and rent it again? Or do I fix it up and sell it?
Oh yeah, and by the way...I'm closing on My Second Property in two weeks...
The. Day. Has. Come.
TODAY, I received my first rental deposit for the amount of $600 ($750 gross rent - $150 lease up fee). So that's a HUGE sigh of relief.
From here on out, I should receive $675 ($750 gross rent - $75 property management) in my account "between the 21st and 26th" of every month. The tenant's rent is due by the 5th of each month, and its takes my Property Management company a few weeks to process/send it to me.
Here's to hoping this tenant pays on-time consistently and for the remainder of the 12 month lease.
At this point, I'm a little speechless...I closed on my property about 4 months ago and now it's FINALLY rented. This is just the start of my journey. There's no telling if my strategy will work for me. Or you. Or anyone. But, I've committed to it and I'm excited for the future.
Leave comments below. Shoot me emails. Let me know how you're doing!
Let's go through a little recap here:
March 3rd to March 5th - Visited Indianapolis to meet with PM/contractor and walk through completed property. Property was still vacant at the time. I gave them the verbal OK to market the property and get it rented ASAP.
March 22nd - Sent check-in email to get status of renting the property. No response.
March 27th - Sent another check-in email to get status of renting the property. This time I got a response from the CEO saying the property was rented and fully occupied.
Received a copy of the signed 12-month lease. Rent is set at $750 per month. My first rental payment will come through via direct deposit for the amount of $600 ($750-$150 new lease fee). Every month after that I'll receive $675 ($750 - $75 Property Management fee).
SO, it's been 3 months since I closed on my property. The place has been renovated and is officially rented! Don't get me wrong, it's been a long 3 months, but I'm excited and happy for what could transpire. I know I'm no where close to becoming financially free, I'm no where near being "out of the woods," on this property, but I've taken the first step and hit some milestones. Let's see how this rental plays out and what the next 6 months, 1 year, 3 years, offers.
I've learned A LOT these past few months and will continue to gain knowledge everyday.
At this point, you've witnessed my journey through acquiring and renovating a property. Those two aspects of real estate investing might seem like the biggest priorities, but finding and placing a good tenant is just as important. Having a great quality property management company maintaining your property is HUGE! One bad tenant or one major expense that's ignored...and BOOM, there go all of your returns.
After signing a Property Management Agreement with a company the Turnkey Company referred me to, and sending them direct deposit information, here are the terms:
-$150 tenant placement fee per lease term.
-10% of monthly rent to property manager.
-Owner shall reimburse manager for all advertising expense upon presentation of bill.
-Maintenance services shall be provided at cost of $20 per man hour or at Cost + 10% for outside services.
-Eviction: $100 fee + court costs.
-Must provide 30 day written notice to terminate Property Management agreement.
-Create a separate checking account for any new rental property you own. Keep accounting clean!
-Interview multiple Property Management companies, and compare how their rates and terms compare.